Detailed Narrative
Q3 FY26 Performance Overview
Rajshree Polypack Limited reported a marginal 1.49% year-on-year decline in revenue from operations, which stood at ₹71.62 crores in Q3 FY26. Despite this, profitability saw significant improvement, with EBITDA growing 13.82% to ₹10.30 crores. EBITDA margins expanded to 14.38% from 12.45% in the prior year, and Profit After Tax increased 25.38% year-on-year to ₹2.13 crores, reflecting better product mix and operational efficiencies.
Domestic and Export Market Dynamics
Export revenue emerged as a strong growth driver, increasing 40.87% year-on-year to ₹20.54 crores in Q3 FY26, primarily driven by Injection Moulding products. Conversely, domestic revenue experienced a 12.11% year-on-year decline, reaching ₹51.08 crores. This decline was attributed to lower raw material prices impacting realizations, particularly in sheet sales, and a seasonal moderation in institutional offtake. Management anticipates a recovery in domestic volumes in Q4 FY26.
Product-Wise Performance and Capacity Expansion
Injection Moulding products demonstrated robust growth of 37.39% year-on-year, with sales reaching ₹17.59 crores, largely due to strong export demand. Thermoformed packaging products maintained stable sales at approximately ₹38.30 crores. Sheet sales, however, were lower at ₹15.22 crores, reflecting an 18.43% year-on-year decline. During the quarter, the company increased its Extrusion capacity to 25,600 MTPA from 24,000 MTPA, enhancing backward integration and positioning for higher volumes.
Operational Efficiencies and Cost Management
The company achieved an improvement in its Cost of Goods Sold (COGS), which decreased from 60.64% to 56.41%. Employee costs increased due to annual increments and the commencement of Unit III operations, partly offset by savings in job work charges. Strategic initiatives include an investment of approximately ₹2.25 crores in a renewable energy SPV, projected to save ₹1.5 crores annually in power costs. Additionally, the conversion of ₹20 crores of loans to lower-rate foreign currency loans (₹14 crores converted in Q3, ₹6 crores planned for Q4) is expected to save ₹1 crore annually in interest.
Joint Venture (Olive Ecopak) Update
The joint venture, Olive Ecopak, reported Q3 FY26 revenue of ₹15.69 crores, a significant increase from ₹12.05 crores in Q2. EBITDA improved to ₹1.15 crores, with margins of 7.33%. Despite this progress, the JV has accumulated losses of ₹24 crores, with Rajshree Polypack's share being ₹12 crores. Management expects the JV to achieve break-even at the PBT level with ₹23-24 crores revenue in the next quarter and is positive about starting exports to the US from Q1 FY27 following tariff ease.
Future Outlook and Growth Strategy
For FY27, the company projects plastic business revenue of ₹360-370 crores with an EBITDA margin of 15-15.5%, and paper business revenue of ₹120-130 crores with an EBITDA margin of 16-16.5%. The goal is to utilize the existing plastic capacity of ₹400 crores without significant additional capex. Long-term, the company aims to grow the plastic and thermoforming segments by another 40-50%, targeting ₹700-750 crores in these two segments, while also exploring new product categories.